Medicare is under attack from both sides

The latest pre-election stoush is being fought over Medicare. Labor is focusing on government plans to outsource the Medicare payment system. The Liberals are denying any plan to privatise Medicare while simultaneously accusing Labor of working to commercialise the same payment system. No party wants to be seen to be attacking Medicare during an election campaign. But because both parties bow to demands of the market these attacks will continue by stealth no matter who wins the election. 

Budget cuts, new doctors’ fees and talk of privatisation has led to a growing fear that Australia is heading towards a US-style health care system. One look at health care in America will tell you that is not where we want to be heading.

Those who champion privatisation often claim that marketisation increases efficiency and lowers costs. The fact that the US pays the most per capita for healthcare the world, and ranks among the worst in terms of accessibility and overall efficiency, should put an abrupt end to that line of thinking. Yet the push towards privatisation continues.

But why is the US system so obviously a failure while other countries’ health care systems, like ours, seem relatively good?

Australia has not always had universal healthcare, and its existence is not serendipitous. The precursor to Medicare, Medibank, was introduced by the Whitlam Labor Government under immense pressure from below. The goal of universal healthcare was so contentious in the parliament that it triggered the 1974 double dissolution election.

When Medibank began in 1975 it immediately came under attack. The next year the Fraser Liberal Government then introduced an increased 2.5% levy, the first of what would become many attempts to wind back this important social gain. The levy would apply to everyone except those who took out private health insurance, a move to try to coax people out of the public system.

To stop the levy a 24-hour nationwide general strike was called by the ACTU (Australian Council of Trade Unions), beginning the process of weakening the Fraser government. Ignoring the protests, Fraser introduced the increased levy.  However, the movement in favour of free, universal healthcare helped to throw out the Fraser Government and forced Labor under Hawke to reverse the changes under the new Medicare system.

The recession of the late 1970s, and declining profit rates, meant that governments were keen to pick apart publically owned services in search of new avenues of profit. By the 1980s, influenced by Thatcherism in the UK and Reaganomics in the US, neoliberalism became the dominant ideological view. This meant widespread privatisations of state industries, cutbacks in state welfare spending, and an assault on the established trade union strengths.

This period saw the introduction of user-pays education by reintroducing university fees in the form of HECS, tax breaks for corporations and top income earners, widening inequality due to stagnating wages, and the beginning of an historic decline in union membership. This was all done under the Hawke Labor government.

During this time, more and more of the cost of health care was being borne by ordinary people. The Medicare levy increased from 1% to 1.5%, and now sits at 2%. But universal public health care had become so popular that no government dared openly say they wanted to undo it.

Throughout the 1990s Howard Liberal Government set up a private health insurance system, Medibank Private, to rival Medicare and draw people away from the public program. It worked and the publicly run private health insurer has 3.6 million members today. But it took the Liberals almost a decade to complete this privatisation. Howard took the policy of privatising Medibank to the 2007 election and lost. Tony Abbott first took it to 2010 election and lost. Finally, after winning the 2013 election Abbott privatised Medibank in 2014.

That fact that the Australian government set up a private health insurer with public money to undermine it’s own public health care system says everything about the dominance of pro-market ideology in relation to social services.

The most recent attacks on health care have come from Liberal governments and provoked a huge backlash from ordinary people. Further privatisations have been proposed, as well as a GP co-payment to force people to pay more to see a doctor. There are also plans to increases to the cost of preventative services like blood tests and pap smears. The government also aims to privatise Medicare’s payment system.

All of these changes are designed to make ordinary people shoulder the cost of a slowing economy. If Turnbull had his way he would privatise the whole health system. But after the public backlash against Abbott, he knows such a brazen move would provoke anger from voters. The current plan is to pick off each aspect of the public system one-by-one. If this is allowed to happen it will be a disaster for working class people.

As we have seen in the US, making healthcare less accessible and allowing companies to profit makes the entire system more expensive and less efficient. According to the World Health Organisation, the United States is number 1 in terms of health care spending per capita but ranked 39th for infant mortality, 43rd for adult female mortality, 42nd for adult male mortality, and 36th for life expectancy.

In the US, Medicare and Medicaid only offer limited health insurance for the elderly and those below the poverty line. For everyone else, health insurance must be bought through for-profit insurance companies. The top 5 largest health insurers make an estimated $3.5 billion in pure profit each year!

Because many people receive health insurance from their employer, the loss of stable, union employment has meant many people have lost their healthcare.

In response to this burgeoning health crisis, the Affordable Care Act, or “Obamacare”, aimed to increase the number of people with private health insurance. While more people now have coverage, it was a tremendous boost for insurance company profits and offers no solution to the long term problems associated with a for-profit system.

From 2003 to 2013, the average cost of health insurance for US families rose 80%, outpacing both inflation and wages. Tenet Healthcare, one of the largest private health care providers, has kept psychiatric patients in hospital to fill beds, performed hundreds of cardiac surgeries on healthy patients, offered kickbacks for referrals and collected hundreds of millions of dollars in unearned payments from Medicare. And that’s just from one company! In a privatised system it is sometimes more profitable for corporations to commit fraud, lobby politicians and tax dodge than it is to provide proper health services.

Obamacare assists some in the case of hospital emergencies, but offers little in the way of affordable or preventable health care. Research shows that Americans are much less likely to see their doctor when they’re sick, get recommended tests and treatments, or see a dentist than people in countries with universal healthcare.

Back in Australia, an important argument against the introduction of a Medicare co-payment is that it will deter people from regular check-ups with their GP and potentially lead to more trips to hospitals. The average cost of a GP visit is $47 from Medicare, while the average trip to the emergency department costs $600.

Universal public healthcare is a basic human right that was fought for and won over 40 years ago. But since its beginning it has been continually undermined. The slowing Australian economy means has meant a reduction in tax revenue. But rather than force the one in three big businesses that don’t pat tax to fork out, the government is looking to make cuts to Medicare.

In fact, both of the major parties now have the task of creating new profitable investment opportunities for their corporate backers. The health care industry is a perfect target to free up government revenue and find new sources of profit through privatisation, if government can avoid the angry backlash the Abbott faced. For as long as our government is dominated by politicians who worship the free market – no matter how much evidence proves a privatised system doesn’t work – Medicare will remain under threat.

But the future of Medicare isn’t doomed. Doctors are currently organising to campaign against the Medicare rebate freeze, a precursor to the introduction of a co-payment. In May, the professional association for GPs called in its 30,000 members to actively oppose the widely unpopular policy. Combined with public protests and the involvement of other health workers the plan to introduce a co-payment can be defeated. But this will only happen it we fight for it, like the movement that won us a public healthcare system in the 1970s.

– By Toby Dite, member of the Health Workers Union in Victoria

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